Green Graveyard: 19 Taxpayer-Funded Failures

While there’s speculation over which federally supported green energy company may be the next to declare bankruptcy, plenty have already gone belly up. In one of the most extensive compilations to date, Heritage has identified 19 bankrupt green energy companies—unable to make it even with the $2.6 billion in financial assistance and incentives the government promised.

This blog is part of the “Green Graveyard” series, which will profile each of the 19 now-bankrupt companies and detail all the types of government assistance offered. These companies were all part of President Obama’s attempt to stimulate the economy by developing and expanding the “green” energy industry.

The problem is that these taxpayer-funded handouts never achieve the intended objective. Rather, they artificially support politically preferred companies and industries, like green energy, while shifting jobs and resources from another sector of the economy.

As the following examples demonstrate, the government’s proclivity to offer financial assistance and incentives to the green energy industry is a bad policy that’s been plaguing Washington since long before President Obama took office.

News of federally backed bankrupt energy companies is infuriating, but failed companies are not the only problem. The fundamental problem is that the federal government is risking taxpayer dollars to bet on companies in the first place. Regardless of their fate, the government should not be “investing” in private-sector companies, especially for an industry in which there is already ample demand and diverse supply.

The fact is, we should be equally infuriated about the successful companies. These are companies that have good products to offer and do not need taxpayer support. There is a phrase for subsidizing successful companies: corporate welfare. As Heritage’s Nick Loris has explained many times before, “Two kinds of companies seek subsidies: economically uncompetitive companies, which need the subsidy to survive, and potentially competitive companies, which use subsidies to pad their bottom lines. Neither case can be justified.”

Nonetheless, pointing out the failed companies is important, as it reveals the contortions politicians will go through to support private companies when their political narrative is at stake. While government intervention in the private economy didn’t start and will likely not stop with President Obama, the growing list of failed companies demonstrates the futility of central economic planning.

Before taking a closer look at the individual bankrupt companies and the financial assistance and incentives the government offered to them, a few caveats. These numbers do not reflect the amount of government funding the company necessarily received or used—these are amounts the government was willing to risk. These figures do offer estimations of assistance provided by local, state and/or federal governments. This assistance could have been promised to the companies in a variety of ways, including tax credits, loans, loan guarantees, grants, and other forms of financial incentives and support. The numbers below are the best calculations possible given the incomplete, at times even inconsistent, information from the government and other sources.

Additionally, during bankruptcy proceedings, these companies could very well be purchased by another company and be brought back to life. However, their tombstone in the Green Graveyard will remain as a reminder of the darker days.

Total of Government’s Bad Bets: Approximately $2.6 billion

1. Abound Solar

Government’s Bad Bet: $ 790.3 million

2. Solyndra

Government’s Bad Bet: $570 million

3. A123 Systems

Government’s Bad Bet: $377.1 million

4. Ener1 (EnerDel, subsidiary)

Government’s Bad Bet: $182.8 million

5. Range Fuels

Government’s Bad Bet: $162.3 million

6. Azure Dynamics

Government’s Bad Bet: $119.1 million

7. Energy Conversion Devices (subsidiary, United Solar Ovanic)

Government’s Bad Bet: $110.3 million

8. Evergreen Solar, Inc.

Government’s Bad Bet: $84.9 million

9. Beacon Power

Government’s Bad Bet: $77.4 million

10. Raser Technologies

Government’s Bad Bet: $33 million

11. Nordic Windpower

Government’s Bad Bet: $24.6 million

12. SpectraWatt

Government’s Bad Bet: $20.5 million

13. Konarka Technologies

Government’s Bad Bet: $13.6 million (Heritage’s calculations), $20 million according to Konarka’s website

14. Satcon Technology Corporation

Government’s Bad Bet: $17 million

15. Olsen’s Crop Service and Olsen’s Mills Acquisition Co.

Government’s Bad Bet: $10.8 million

16. Stirling Energy Systems, Inc.

Government’s Bad Bet: $10.5 million

17. Thompson River Power, LLC

Government’s Bad Bet: $6.5 million

18. Cardinal Fasteners and Specialty Co., Inc.

Government’s Bad Bet: $480,000

19. Mountain Plaza, Inc.

Government’s Bad Bet: $424,000

As our Green Graveyard series continues, we will go in-depth with each of these companies and provide details of funding sources, timelines, and more.

Join The Discussion

People hear the word "bankruptcy" and are manipulated to observe it as punishment not process. The Mr. Obama certainly isn't going to explain why it exists! Did you see how easy it was to spin responsibility into hatred? Mitt wanted chevy or gm to take responsibility all the way through as all private businesses were held accountable to.. Obama gives us the consequences of all his risky business and keeps us in the dark. When we're forced to pay for the careless risks of government, the only ones that get paid back is government. The responsible party doesn't carry out their responsibilities and we're held accountable? how is that fair in the least bit? It's discrimination for government to practice public private partnerships off the backs of people and especially who have nothing to do with the business. If people in government authority want to do business with the private sector, they'll pick the honorable way and relieve themselves from their political posts and promote themselves to the private sector. If a business can't run on it's own it has no right in business!! We're responsible for our own why isn't obama holding that to everyone? I'll tell ya why! Once he's (government) in he's (government) the owner! We love industries who have the inherent dignity to fight against government intrusion and do whatever is necessary to keep away from unconstitutional involvement!

CHEVY RUNS DEEP, where government runs deeper!! These green jobs are hidden more so from the public as Mr. Obama loves to keep who he can in the dark of his truth. If it is a tight race this is the only reason this is a tight race. Obama keeps half the country on his side, misinformed and in the dark!

The reason for the subsidies was that the risk of failure was high enough that the projects could not get conventional financing, but that their success would be in the nation and the planet's best interests. I watched the Congressional hearings on CSPAN. You should know that the failure rate for this program was LESS than the failure rate for similar projects with conventional financing.

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